Yesterday, the Scottish Parliament passed an emergency Coronavirus (Scotland) Bill that includes some points that are relevant for our sector. The main parts are the announcement of an interest-free loan scheme for landlords whose rental income has dropped and some temporary changes to the notice and eviction processes.
Interest-free loan scheme for landlords
Landlords who experience a drop in rental income will be able to apply for an interest-free loan to help get through any period during which tenants could struggle to pay full rent, or where their properties may sit vacant for longer. The interest-free loans should be available by the end of April and we await more details about the scheme.
Changes to notice and eviction procedures
The Scottish Parliament has approved changes to notice and eviction procedures that will come into effect in the next few days and be in place until 30th September 2020 (although this could be extended). The changes mean that during this period all evictions will be discretionary. If the tenant doesn’t voluntarily vacate at the end of their notice period and the landlord has to apply for an eviction order at the First-tier Tribunal (the court for all housing related matters in Scotland). The tribunal will decide based on the circumstances of the case whether the tenant’s need/right to occupy the property is outweighed by the landlord’s need/right to repossess the property. The legislation also makes changes to the notice period that the landlord is required to give the tenant, the length of which depends on the eviction ground being used.
What does this mean in practice?
Our professional view is that it’s extremely unlikely for a tenancy to be brought to an end through the First-tier Tribunal. This is partly because it’s very unusual for agreement not to be reached between the landlord and the tenant, should a tenancy be unable to continue. Also, the First-tier Tribunal is currently not hearing cases until the 28th of May at the earliest, and we’re expecting there to be a large backlog of cases when it does reopen.
Over the last few weeks, we’ve seen many of our student tenancies come to an end when the universities closed and students headed home. Many of our professional tenancies have been affected as tenants have lost their jobs or income but in most of those instances we’ve been able to find a temporary solution to keep the tenancy going until the tenant has some certainty of how, when and what they will be earning again. As difficult and strange as this time is for everyone, we know for certain that this period will come to an end.